This
series of two articles deals with tidbits of information. I usually focus
on one subject… today is different. Things are happening so fast
(and furious).

MILITARY FUNERAL
PROTOCOL:

Did you know that
the White House has notified all military funeral service departments
to immediately remove the words “the President” and insert
the words “Secretary of Defense” from the funeral services
of veterans? The sentence has traditionally been: “On behalf of
the President of the United States and a grateful nation, I wish to present
you with this flag in appreciation for your husband’s (or son’s
or daughter’s) service…” With these words, the American
flag, so carefully folded for this moment, is given to the appropriate
family member.

An officer who gave
the flag to a family member after using the words “The Secretary
of Defense and a grateful nation…” was approached by the recipient’s
nephew. This information was brought to my attention via an email. I checked
it out with Snopes. The nephew asked the flag presenter why the words
“Secretary of Defense” were used rather than the traditional
“President of the United States.” His answer: “The White
House notified all military funeral detachments to immediately remove
‘the President’ and insert ‘the Secretary of Defense’.
Though Snopes is a bastion of liberal thought and gives a long rationalization
as to why it was done, it is true.

Why is this important?
It shows the total lack of respect America’s President has for us,
our military, and their families.

AYN RAND QUOTE FROM
ATLAS SHRUGGED: "When you see that in order to produce, you need
to obtain permission from men who produce nothing; when you see that money
is flowing to those who deal, not in goods, but in favors; when you see
that men get rich more easily by graft than by work, and your laws no
longer protect you against them, but protect them against you. . .you
may know that your society is doomed."

ON REPUBLICAN POLITICS:

Everyone, regardless
of political party, should watch this very short video (click
here). This is a fabulous show of Herman Cain doing his own rendition
of John Lennon’s song, “Imagine.” What a great sense
of humor and what singing talent Cain has! If the guy wasn’t the
former Chairman of the Board of Governors at the Kansas City Federal Reserve,
I’d support him. He was at the KC Fed for four years… a member
of that Board for two years, and Chairman for two years. If not for that,
Herman Cain would have my vote in a heart beat. I love the guy…
but I don’t trust former Federal Reserve Board Chairmen.

During the CNN broadcast
of the most recent Republican debates, Cain took a beating from other
candidates over his 9-9-9 plan. He’s a self confident adult male
and we will hear no suggestions of racism from him. This is a strong man
who will never be anyone’s victim. Everyone is after Cain because
he’s pulling ahead of the field and leaders are always attacked
by the pack of dogs behind them. As it happens, 9-9-9 is vulnerable.

Perhaps you’re
not as suspicious as I am, but when an obvious question that should be
asked by the mainstream media is not asked, there is a reason. No one
is asking Herman Cain about his four years of service with the Fed. Why?
Since the economy is the number one issue of this political campaign season,
it’s one of the most significant questions that could be asked.
Among conservatives, no institution is more distrusted than the Federal
Reserve System. None is more disliked. Since conservatives see the Fed
as the greatest villain in American history, and since no Republican candidate
can be elected without conservative support (especially since the Tea
Parties and Liberty Action Groups came into being), this is a key issue.
It makes the reason the mainstream media and O’Reilly and Hannity
are ignoring it – questionable.

Is Cain a Trojan
Horse? Is he being walked into the middle of what will appear to be a
primary victory only to have this disclosure upset the apple cart –
and will we get stuck with Newt Gingrich? Newt is the best-qualified candidate
on the debate stage. He is also the most ethically challenged. Lacking
an evident moral compass, he is also the most “buyable.” Newt
showed his true colors when he had a Republican Congress and prostituted
the Contract With America. Many of us haven’t forgotten.

Michelle Bachman
is right about Cain’s 9-9-9 Plan. It is a VAT (Value Added Tax –
see definition below). After watching Cain’s video, consider this:

“Imagine...
there’s no bread;
Just because of the Fed;
Imagine... you can’t dine;
Because of 9-9-9.”

To explain why 9-9-9
equates to a value added tax, look at the creation of a loaf of bread.

The farmer delivers
whole-wheat flour to the mill... he must pay a Herman Cain 9 percent tax
on farm profits (and passes the 9 percent cost on to the miller). The
miller delivers the flour to the wholesaler and must pay a 9 percent Herman
Cain profit tax on the transaction (and passes the 9 percent cost on to
the wholesaler). The wholesaler delivers the flour to the baker... the
wholesaler must pay a Herman Cain 9 percent tax on the flour sale (and
passes the cost on to the baker). Imagine... every item that goes into
a loaf of bread (from yeast to eggs to whatever...) will go through the
same profit taxing process. The baker has to pay that 9 percent increased
cost on every item that goes into a loaf of bread. Who do you think will
pay the additional cost? If you said the consumer, go to the head of the
class!

That is what a VAT
is... accumulated taxes on a product as it goes through the process of
being created. The above example is just about a loaf of bread. Picture
that same process in the building of cars, airplanes, digital cameras
and phones, computers... more complex instruments with hundreds or thousands
of parts and chips. Each company that sells one of those parts to build
that more complex instrument will have to pay Herman Cain’s 9 percent
profit tax on that part. How do you think that will impact airfares? Automobile
costs? Food costs?

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Does 9-9-9 still
sound good to you? If so, you might want to contemplate the 16th Amendment,
which hasn’t been repealed. The 16th Amendment allows the Congress
to levy an income tax without apportioning it among the states or basing
it on Census results. Why is it whenever anyone talks about the Flat Tax
or a National Sales Tax, they don’t talk about getting rid of the
16th Amendment – which, until it is repealed, gives the Congress
the right to charge both a flat or sales tax and an income tax? Think
it through.

Too, Herman Cain
says there is no need for an audit of the Federal Reserve. He says if
you have a question about what the Fed is doing, call them and ask. They’ll
give you an answer.

If the Fed’s
answers can be trusted, why did it take Ron Paul years to get a partial
audit of that private corporation? Did Cain miss the result of the partial
Fed audit (to which Bernanke strongly objected) proving the Fed made $16
trillion in very low-cost secret loans to major investment banks on Wall
Street in 2010? The Fed also made trillions of dollars of secret low-interest
rate loans to numerous foreign banks in Germany, France, and Japan. They
also loaned to major international corporations. This is not Internet
gossip. Go to Senator Bernie Saunders’ Web page and read this result
from the audit yourself. There is little (if any) doubt that America’s
economic woes result from the policies of the Federal Reserve System –
of which Herman Cain was a very active member for four years. If the Federal
Reserve System had given honest answers to questions asked of it, we wouldn’t
be in this mess, Herman. Surely by now the American people understand
that taxpayers pay for Fed debt… look at your cancelled income tax
checks each year. Who cashed them? If you think it’s the Treasury
Department, think again.

WHY THE CREDIT FREEZE?
ARE ALL THE CLOSED BANKS FAILED BANKS?

These topics “go
together.”

When you borrow money
for a major home improvement, what asset is used for bank collateral?
When you borrow to help put your kid through school so he/she won’t
be paying federal student loans off for 20 years after graduation, or
when you borrow for a long vacation or apply for a personal line of credit,
what asset do you use for bank collateral? If you’re like most people,
it’s your home.

Commercial banks,
generally speaking, do not write a lot of first mortgage loans. Savings
banks and mortgage companies write most first mortgages. Commercial banks
have, until the current banking crisis, taken a lot of second mortgages
on homes for other long-term credit needs. Since property values have
fallen so drastically, there is no longer sufficient equity in most homes
to serve as collateral on the first trust deed (the mortgage), let alone
collateralize a second loan. A home that was worth $200,000 may now be
worth $150,000 – or less. When the first mortgage is factored in,
a large percentage of homes have nothing called equity remaining. If you’ve
wondered why there is a “credit freeze,” you might want to
keep this in mind. Add to that the always-escalating unemployment and
failing businesses statistics. Both cause severe limitations in gaining
access to credit.

Enter bank auditors
(from the FDIC or the Office of the Comptroller of the Currency). Banks
still have a large number of long-term loans collateralized by second
trust deeds on their books from pre-2008 when the real estate market crashed.
Most of the loans secured by a second trust deed represent houses with
too little (or no) equity. Thus, the house is no longer a valid form of
collateral. The bank often calls people with such loans and demands additional
collateral… even though the borrowers haven’t been a day late
with a payment. Most people have gone into savings to pay for things;
most don’t have additional collateral to offer (especially since
the car isn’t paid for and since it serves as collateral for the
car loan, it has no equity value, either). The bank has, for all practical
purposes, an unsecured loan. It may have a second trust deed on your home
to collateralize your loan, but your home has no equity beyond the first
mortgage which it also collateralizes.

As a result, when
bank auditors look at the bank’s loan portfolio, they see a bunch
of unsecured loans…, which are far more likely to represent a loan
loss to the bank than do collateralized loans. The auditor grades the
loans because without equity in the home as collateral, the bank’s
risk quotient has increased substantially. A time frame for collection
is imposed on the bank by the auditors and the borrowers (who are shocked
because of the changed terms in their loan agreement because they are
not behind in any payments) cannot meet the new terms. A loan loss has
been created. The credit rating of the bank is lowered; it is a likely
target for an FDIC takeover – and the bank will likely be sold to
one of the too big to jail guys. Remember, that’s how J.P. Morgan
made his fortune… create an environment that causes your competition
to fail, then buy them. Would I suggest that Daddy Government would aid
and abet in the failure of one bank so another, bigger one could buy it?
Please!

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Be careful not to
listen to all of the “banks aren’t lending… we’re
the 99 percent who aren’t getting anything… redistribute the
wealth” psychobabble commentary coming from the Occupy America crowd.
When people talk about “social justice,” the word social is
used for a reason. I have a hard time believing the stories about Tea
Party members joining this group. I understand their frustration, but
not their willingness to join with a bunch of socialists so they can get
it off their chests. Good grief! Wake up!

For information about
the dangers of buying foreclosed homes, the $53 trillion the Fed and Bank
of America just added to FDIC potential liabilities, and the legitimate
reason behind “too big to fail,” read Part II of this Series
Wednesday.

Marilyn
MacGruder Barnewall began her career in 1956 as a journalist with the
Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and
bank consultant, she wrote extensively for The American Banker, Bank Marketing
Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private
Banker International (London/Dublin), and other major banking industry
publications. She has written seven non-fiction books about banking and
taught private banking at Colorado University for the American Bankers
Association. She has authored seven banking books, one dog book, and two
works of fiction (about banking, of course). She has served on numerous
Boards in her community.

Barnewall
is the former editor of The National Peace Officer Magazine and as a journalist
has written guest editorials for the Denver Post, Rocky Mountain News
and Newsweek, among others. On the Internet, she has written for News
With Views, World Net Daily, Canada Free Press, Christian Business Daily,
Business Reform, and others. She has been quoted in Time, Forbes, Wall
Street Journal and other national and international publications. She
can be found in Who's Who in America, Who's Who of American Women, Who's
Who in Finance and Business, and Who's Who in the World.